Newly-registered firms in Korea in 2018 expected to surpass 100,000

The number of new corporations set up in South Korea last year is estimated to top 100,000 for the first time as both retired people aged over 60 and younger people under 30 rushed to establish their own businesses amid sluggish economy, government data showed Sunday.

According to the Ministry of Small and Medium-sized Enterprises and Startups, the number of newly-registered firms in the country from January to November last year came at 93,798, up 4.6 percent from a year-ago period. Although the number for full-2018 has not been tallied yet, the ministry forecast it would exceed the 100,000 mark for the first time, 10 years after the figure surpassed the 50,000 level in 2008 for the first time.

New corporations refer to businesses that finish registration of incorporation, which include limited liability and stock companies, joint ventures and merged firms. They are different from the self-employed.

While a majority of the new companies, 58.4 percent, were set up by people in their 40s and 50s, the number of new firms launched by people over 60 soared 11.8 percent from a year earlier and the figure for those who under 30 also surged 11.6 percent. Business establishment by people in their 40s and 50s edged up just 0.9 percent and 4 percent on year, respectively.

Under normal circumstances, a rise in new corporations generally indicates a revitalization in economy. But the latest data reflects grim economic reality in the country, experts suggested, as it could mean that retired people were forced to start new businesses out of financial struggles and younger generation finds it difficult to get a job amid economic downturn.

The number of Koreans out of work sharply increased by 4.4 percent on year to 909,000 in November, the first time above the 900,000-threshold for the month since 1999 in the wake of 1997-98 financial crisis.

Among the new corporations, small firms with equity capital less than 50 million won ($44,655) accounted for 76.5 percent, up 6 percent compared with a year ago.